Correlation Between Barrick Gold and PEPSICO

Can any of the company-specific risk be diversified away by investing in both Barrick Gold and PEPSICO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barrick Gold and PEPSICO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barrick Gold Corp and PEPSICO INC, you can compare the effects of market volatilities on Barrick Gold and PEPSICO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barrick Gold with a short position of PEPSICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and PEPSICO.

Diversification Opportunities for Barrick Gold and PEPSICO

0.34

Correlation Coefficient

Barrick Gold  PEPSICO

Weak diversification

The 3 months correlation between Barrick and PEPSICO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and PEPSICO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC and Barrick Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barrick Gold Corp are associated (or correlated) with PEPSICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPSICO INC has no effect on the direction of Barrick Gold i.e., Barrick Gold and PEPSICO go up and down completely randomly.

Pair Corralation between Barrick Gold and PEPSICO

If you would invest  0.00  in PEPSICO INC on September 26, 2024 and sell it today you would earn a total of  0.00  from holding PEPSICO INC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.8%
Values	Daily Returns

Barrick Gold Corp  vs.  PEPSICO INC

Barrick Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

PEPSICO INC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days PEPSICO INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PEPSICO INC investors.

Pair Trading with Barrick Gold and PEPSICO

The main advantage of trading using opposite Barrick Gold and PEPSICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, PEPSICO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PEPSICO will offset losses from the drop in PEPSICO's long position.

The idea behind Barrick Gold Corp and PEPSICO INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.